Brexit, bricks and mortar – how the UK housing market is reacting to Britain’s leave vote
In the wake of the UK referendum vote to leave the European Union, differing views have been voiced on how Brexit may affect Britain’s property market.
Already, it seems, overseas investors are snapping up properties in places like London. Estate agents have reported receiving calls from Chinese, Middle Eastern, Italian and Spanish investors shopping around for bargains.
Early indications show that while a number of European buyers may be tentatively dipping their toes into post-EU property investment in the UK, those from further afield are looking to dive in head-first to take advantage of the current indecision in the market and sterling’s weakness.
Closer to home, the picture for domestic buyers is unclear. Estates agents’ records show that on the weekend after the referendum Brexit result, the number of buyers who pulled out of their house purchases rose by 11 per cent. Considering the uncertainty that was already affecting the housing market in the months running up to the referendum, this increase is surely significant.
The National Association of Estate Agents has reported a slowdown in buyer demand in the lead-up to the EU referendum, with the number of registered house hunters per estate agency branch hitting a three-year low in the month of May.
However, Nationwide’s house price index showed that average UK property values rose 0.2 per cent during both May and June – evidence that house prices remained firm despite a reported drop in demand before the EU poll.
While there seems no doubt that the UK’s new Brexit direction has brought heightened uncertainty to the domestic property market, what is much less clear at this time is the full impact of the UK’s ‘leave’ vote over the longer term.
Once the dust has settled later in the year, I anticipate the housing market will start to pick up again – people will still need to move home, lenders will still be on hand to lend and, with mortgage pricing remaining highly competitive, we could even find ourselves in a good buyers’ market, which in turn could bring a short-term fall in house prices.
On balance, I expect the UK Bank Rate to stay unchanged in the immediate future, although the option remains for the Bank of England’s Monetary Policy Committee to cut the rate in order to stimulate the economy.General, George Ide, Investment, News, Private Client, Residential Property Conveyancing